Paschal Donohoe promises help for small businesses as retailers fear Christmas blackouts

Small and medium-sized businesses will receive domestic help to cope with rising energy costs, the finance minister said.

Aschal Donohoe said the rising cost of living, ongoing capital investments and corporate tax reform are his priorities for the upcoming budget.

However, he said that while the government “can help” it would act in a way “that does not create unnecessary and new risks for the economy” – code for feeding into rising inflation.

“The SME sector is a really important and vital part of the Irish economy which has already received immense support during the time of the pandemic,” Mr Donohoe said in a webcast organized by consultancy PwC and recorded last week.

“I do recognize that for them the issue of energy and energy costs is of particular importance and must be factored into the consideration that I and [Public Expenditure] minister [Michael] McGrath will take action later in 2022.

His comments come after the head of the country’s largest retailer said businesses need a cap on energy costs if they want to “keep the lights on this Christmas”.

“Retailers of all sizes are currently grappling with unprecedented energy bills that are threatening the livelihoods of thousands across the country,” said Duncan Graham, chief executive of the Retail Excellence group of companies.

“It is vital that we see major government intervention in the upcoming budget to ensure businesses can keep the lights on this Christmas.”

The government is preparing the budget at a time of high tax revenues, which Donohoe says would help it cushion the blow of the cost-of-living crisis.

He said there was “no sign” that the fiscal good fortune would fade this year or next as multinational job creation and profits are buoyant.

“If any tax has proven its resilience in recent years, it’s actually taxes on income tax and corporate income tax,” he said.

“We’ve both seen increases, which either reflect the profitability of the businesses based here, but also further reflect the fact that we have a very, very diverse workforce across many different sectors of our economy who have seen their wages start to rise to change during and after the pandemic.”

Tax revenue at the end of August was 49.8 billion euros, 26.3 percent (or 10.4 billion euros) more than in the same period last year. Corporate income tax revenues are already higher than the total annual revenues of the previous year.

And the budget swung from a deficit last year to a surplus of 6.3 billion euros in August.

However, Mr Donohoe pointed to a slowdown in Ireland’s neighboring economies – including the UK and the eurozone – which could affect Ireland.

“We’ll need all of that [tax revenue] because if I look at where we are at the moment externally, we are going to see significant changes within the UK and we are now dealing with a more intense level of economic fallout as a result of the war that Putin is waging against the UK people of Ukraine.”

https://www.independent.ie/business/budget/paschal-donohoe-promises-help-for-small-firms-as-retailers-fear-christmas-blackouts-41968491.html Paschal Donohoe promises help for small businesses as retailers fear Christmas blackouts

Fry Electronics Team

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